MUMBAI -- The company behind Cafe Coffee Day, India's biggest coffee chain, will launch an initial public offering next week, aiming to raise up to $176 million in the country's biggest IPO in nearly three years.

India has seen fewer IPOs in the last few years because of volatile markets and slowing economic growth, and the response of foreign and local investors to this offering will be a test of appetite for new issues in the current unsettled climate.

Indian companies have raised about $1.1 billion via IPOs so far this year, higher than $223 million for all of last year and $285 million in 2013, but much lower than $3.5 billion raised in 2010, according to Thomson Reuters data.

Coffee Day Enterprises Ltd, which competes with Starbucks Corp among others in India, is backed by private equity firm KKR & Co. It will launch its share sale on Oct. 14, according to its IPO prospectus seen on Tuesday.

The indicative price band for the offering has been set at between 316 rupees and 328 rupees a share, two sources directly involved in the deal separately told Reuters. They declined to be named ahead of a public announcement on Wednesday.

The company said in its prospectus it wants to raise up to $176 million but has not said how many shares will be up for sale.

Cafe Coffee Day has more than 1,500 outlets in India and 14 overseas outlets across Austria, the Czech Republic and Malaysia. The chain plans to use the IPO proceeds to open more outlets and repay loans, its prospectus showed.

The cafe operator opened its first shop in 1996 in the tech hub of Bengaluru, previously known as Bangalore, and quickly expanded across the country as urban consumers sought out spaces to socialise in overcrowded, traffic-congested cities.

The burgeoning cafe culture in a primarily tea-drinking country has also drawn global giants such as Starbucks and Britain's Costa Coffee, part of leisure group Whitbread, and McDonald's, all of which are opening more outlets.

The cafe market in India, Asia's third-largest economy, was worth about 18 billion rupees ($279 million) in 2014 and is growing at 20 percent annually, according to estimates by consultancy Technopak.

Cafe Coffee Day's share sale is scheduled to close on Friday next week and the stock is due to start trading in Mumbai on Nov. 2.